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UN Development Agency Indexing Multidimensional Poverty

21 October 2021, MVT 18:27
Enrico Gaveglia, UNDP Resident Representative in the Maldives -- Photo: UNDP
21 October 2021, MVT 18:27

By: Enrico Gaveglia, UNDP Resident Representative in the Maldives

This week we observed the 2021 International Day for the Eradication of Poverty. It reminded us once again and for the 6th time of the pledge made by world leaders in 2015 to end poverty and hunger everywhere. The global pandemic brought about COVID-19 has posed significant challenges in achieving this target globally, yet the state of the world’s affairs was not at pace with its Agenda 2030 ambitions.

Prior to the pandemic, the Maldives had achieved remarkable progress in poverty eradication. The monetary measures of poverty from the past two decades such as the percentage of population earning below $5.50 a day had been reduced from 19.6 percent in 2002 to 0.6 percent in 2016. Extreme forms of poverty such as percentage of population earning $1.90 a day has been brought closer to zero. The country has graduated from Least Developed Countries (LDC) status in 2011, becoming the first Small Island Developing State (SIDS) to climb the ladder from its LDC status. The following year the nation became the first country in South Asia to reach its Millennium Development Goals (MDG) plus status, having achieved five of the eight goals. The pandemic in 2020 has certainly put hard-won economic and social gains of Maldives at grave risk.

The over-reliance of tourism industry has made the economy particularly vulnerable to the downturns in the sector. The crisis induced by the pandemic contracted the Maldivian economy by 29 percent in 2020 making the country one of the worst hit globally and overshadows past contractionary episodes in recorded history such as in the occasion of the Indian ocean tsunami (-13.1 percent) and the global financial crisis (-4 percent). Although, the Maldives has one the lowest rates of poverty reported from the region, various institutions are already predicting poverty rates may have already doubled and may take a few years to return to pre-pandemic levels. Solid and swift actions are needed to stop the rapid advance of falling back into a poverty trap and preserve the socio-economic gains of many decades. Innovative policy tools that can capture the incidence of poverty through a multi-faceted approach going beyond monetary statistics are now a necessity.

On 7th October 2021, UNDP launched a global Multidimensional Poverty Index (MPI), which presents detailed poverty data on 109 countries covering 5.9 billion people. The MPI goes beyond a monetary measure of poverty and highlight instead how poverty manifests itself in people’s lives, how intensely it is experienced, and which groups are most affected. The MPI methodology looks at how people experience deprivations in different aspects of life: healthcare, education and living standard. The report shows that 1.3 billion people worldwide are multidimensionally poor and nearly half are children under the age of 18. The comprehensive findings of this report are expected to provide insights into the multidimensional nature of poverty and help policymakers target resources and design effective policies to end poverty in all its forms everywhere.

Maldives has also undergone its first MPI exercise back in 2020, using a pre-pandemic dataset from 2017/16, producing important insights for policy making. The data show 0.8 percent of the population in Maldives (4 thousand people in 2019) was multidimensionally poor while an additional 4.8 percent was classified as vulnerable to multidimensional poverty (26 thousand people in 2019). For the Maldives, health deprivation was pre-pandemic reported to be the biggest contributor to poverty, representing a remarkable high 80.7 percent share and highlighting the significant challenges the country faced even prior to the pandemic in facilitating public access to health care as well as nutrition services.

UNDP’s Rapid Livelihood Assessment conducted at the height of the pandemic in 2020 confirmed that the impact of COVID-19 had already reversed gains made in poverty eradication for the Maldives. The survey confirmed that the effect of the crisis has been deep and widespread throughout the economy, hitting all sectors and on average reporting 44 percent job losses or redundancies within just a few months of the pandemic. The survey also reinforced what was already happening in other countries, with the effects of the pandemic felt differently across income groups. The vulnerable cohorts of the population such as women, youth, migrant workers, and informal sector became unsurprisingly the most affected by the socio-economic and health crisis. The full extent of the impact of the pandemic on the nation’s informal sector remains unknown, hence UNDP is currently deepening into research so to surface data and learnings in collaboration with the Maldives Bureau of Statistics.

Eliminating income poverty will not guarantee poverty is eradicated in all its dimensions. Poverty is complex and multifaceted; it cuts across an array of human experience. To eradicate poverty, all its interlinked dimensions must be tackled. UNDP is working with governments and communities across the world to address inequalities, social exclusion, lack of decent work, and environmental degradation – all of which must be tackled simultaneously to eradicate poverty.

UNDP Maldives has recently devised its next five-year Country Programme 2022-2026, and will work closely with the government, private sector, and civil society organizations to ensure the people of Maldives, particularly youth, women, and others at risk of being left behind benefit from inclusive economic growth and have access to decent livelihood opportunities. It is about catalyzing “glocal” efforts, well beyond a classic official development assistance resource complement, which an upper middle-income country does not require. It is instead around soliciting pivots in a socioeconomic system that can and should unleash the untapped value chain of positive return of investment with high dividends to the country, while regenerating the balance sheet of Maldives’ natural assets.

UNDP will support in designing policies and frameworks for inclusive economic growth, establish mechanisms to monitor inclusivity, and in adopting data-driven approaches to monitor labor markets and its impact from shocks. UNDP is an earnest partner in poverty reduction and remains committed to achieve a shared vision of hope: one that is free of poverty, where all people can live in peace and dignity and prosper in an equitable manner.

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